MIPIM | GLP hungry for more after Trafford Park buy 

The logistics developer is looking to grow its North West portfolio having finally prevailed in a highly competitive market to acquire a site within the industrial estate. 

GLP bought a nine-acre site from Tenmat last month and is keen to become a mainstay of the North West logistics market going forward. 

It was not the first time the company had tried to tie up a Trafford Park asset. In 2019, GLP missed out on the acquisition of the former Guardian Printworks to DTZ Investors. 

“[Trafford Park] has been a long-standing requirement for us and a target location. It is the Park Royal of the North West” said Adrienne Howells, development director at GLP. 

Such is the scarcity of sites in the area – they come up “very, very infrequently” according to Howells – it took another three years for the firm to finally land a plot. Now, GLP is weighing up its options in terms of what it might deliver there once Tenmat vacates at the end of the year. 

“Our initial thoughts on the site are that it would easily take a very nice 200,000 sq ft building, and I’m absolutely certain that there is good occupier demand for that,” Howells said. 

Other options are also being considered, including a clutch of smaller, last-mile units, and a data centre. 

It is no secret that the logistics market across the North West is red hot right now. GLP, whose main focus up until now has been in the Midlands, wants a piece of the action. 

“There is strong demand and very limited supply at the moment and we don’t see that massively changing anytime soon because there are not a lot of buildings coming through. So [the Tenmat site] is a good strategic asset purchase for us,” Howells said. 

A 200,000 sq ft unit could be created on the Tenmat site. Credit: via Edelman Smithfield

While GLP had to be patient before it was successful in Trafford Park, the company clearly believes the wait was worthwhile and is now preparing to employ more capital to bolster its Greater Manchester presence. 

“We certainly have the capacity to acquire further sites in the North West,” Howells said. 

“If the opportunities come forward, we would certainly see if we could acquire the right ones for us.” 

Now GLP is visible at Trafford Park, Howells is hopeful that more sites at the estate might come across her desk. 

That is what GLP has seen in the South. The company bought a site at Park Royal last year and has since noticed an influx of opportunities there coming to the company directly, Howells explains. 

“There is a direct consequence of being active in the market and actually becoming more obvious to other people like agents and owners. 

“I hope [the Trafford Park deal] will absolutely unlock other opportunities for us and that people really think about us as being a core developer in that market.” 

If sites are not forthcoming right away, Howells won’t be overly worried. According to research by Savills, projections for the logistics sector indicate downward rental pressure won’t come until vacancy rates across the board reach 12%. 

“We are at around 3% vacancy at the minute,” Howells said. “You can see just how undersupplied the market is and because it takes so long to bring forward sites and build buildings, that won’t change any time soon.” 

The undersupply of employment space is not helped by industrial schemes on Green Belt being held up at appeal, according to Howells. 

More than 5m sq ft across various North West projects have had to endure the rigours of planning inquiries in recent years. Howells thinks it is time councils start looking at the Green Belt more practically. 

“It is quite challenging if local authorities are very protective of those areas. It slows down how quickly sites and buildings can come forward. 

“Sites that sit on the corner between two motorways are not enjoyed by anyone. It is not really adding to what you might traditionally think as positive Green Belt,” Howells said. 

While political wrangling over protected plots is contributing to undersupply of industrial space, another symptom of the current market is soaring land prices. 

“If you paid £1m an acre two years ago you’re probably paying nearly £2m now,” Howells said. 

All of this means rents are increasing at rates that haven’t been seen before. Howells warns that developers need to be sensitive about how they approach this dynamic.

“We need to be careful about how we frame things because there is a squeeze on everyone’s pockets at the moment. There is a fine balance between land costs, construction costs and rental growth.  

“We need to keep ourselves afloat while also making sure customers can actually afford our product.” 

Place North West MIPIM 2022 coverage is sponsored by Castle Green Homes.